President Barack Obama is flying to Denver today to sign the latest federal stimulus package. Obama has been traveling around quite a bit, and we should expect more.
On Wednesday, he'll be in Phoenix, which has been hit much harder than Denver by the recession. There, according to the Arizona Republic, he will announce a plan to use $50 billion from last year's bailout package to help prevent more foreclosures. What he will say in Denver has not yet been revealed, except that he likely is to highlight the creation of jobs, perhaps partly through green-energy industries such as wind-generated electricity.
Many citizens, most notably those who voted Republican, are finding a stimulus plan called "ERRP" difficult to swallow. They are voicing concerns that it is too small, it's too large, it contains too much pork, it doesn't provide enough local benefits, it's big government at its worst, and so on. The only point that has garnered widespread agreement is it's a very expensive package that cannot solve all the economic problems this country is experiencing.
What the president says, and how convincingly he says it, may make nearly as much difference as the dollars he is preparing to drop into the economy with the Economic Recovery and Reinvestment Plan.
The purpose of a stimulus plan, obviously, is to stimulate economic activity. The last recovery package failed because it mainly seems to have allowed corporate executives to cover their losses and their rear ends, making TARP an appropriate acronym. Last spring's stimulus payments sank without a ripple.
So the success of this plan depends on Obama's ability to convince people to use money in ways that will bolster the economy. That is going to be a hard sell to the millions of Americans who are hanging on to solvency by their fingernails.
He has some good points with which to work. One is the provision in the plan that requires state governments to move quickly to accept and commit their portions of the money. Speed is an important aspect to stimulating the economy. Delaying would amount to watering down its effect and thereby getting less for our money.
Another point Obama can stress is the enhanced level of accountability and transparency included in the final version of the stimulus plan. An oversight board made up of the inspectors general of no fewer than 10 separate agencies will guard against abuses. So, too, will a newly beefed up General Accounting Office. The reports and audits they generate will be available for public scrutiny on what is being touted as a user-friendly Web site.
Also included in the final bill is a provision encouraging competitive bidding. Critics have complained that the package was too tilted toward "sole-source" contracts.
"Act as if the economy is healthy and it will become healthier," is a message that has garnered general agreement from economists. In order for the government's plan to work, average Americans need to participate, and in order for them to work up the nerve to do that, they need to be shown some evidence the plan is going to work.
The stimulus dance is an intricate one, but Obama needs to sell his plan well. Nearly everything else he might do for the next four years depends on ERRP's success.